JBS to divest beef operations in Argentina, Uruguay and Paraguay

Brazil-based meat processing company JBS has agreed to sell its beef operations in three South American markets to companies controlled by Minerva for $300m.

Under the deal, JBS’ beef businesses in Argentina, Uruguay and Paraguay are being sold to Pul Argentina, Frigomerc and Pulsa.

The deal, which is expected to be completed in July this year, is subject to regulatory approvals.

Minerva stated that it will pay $280m on the closing of the transaction and the remaining amount will be paid following the conclusion of due diligence. .

JBS is at the center of a political scandal which put the job of Brazil's president, Michel Temer, in risk.

J&F Investimentos, parent company of JBS, agreed to pay a fine of $3.1bn for its link in the crimes admitted by the Batista family, who control the group. The company intends to use the proceeds from the latest sale to reduce its financial leverage.

JBS' Mercosur branch, which includes Argentina, Brazil, Uruguay and Paraguay, contributed to a 14.3% decline in the company's net revenue in the first quarter.

Minerva said of the five plants purchased from JBS in Argentina, four are closed and will continue to shut down until market conditions improve there.

Minerva also stated that all plants acquired from JBS are certified to export to the US, Japan and China.

After the transaction announcement, Minerva hiked its net revenue estimate to a range of 13 billion reais to 14.4 billion reais in the 12 months ending June 2018.